As stated in the Consultation Paper published on 14 April 2023, the Hong Kong Exchange proposes to mandate all issuers to make climate-related disclosures in their ESG reports, and introduce new climate-related disclosure requirements aligned with the International Sustainability Standards Board (ISSB) Climate Standard with the effective date of 1 January 2024. For highlights related to the consultation paper, you may refer to the page https://greenco-esg.com/esg-reporting-hong-kong-exchange/.
Given the concrete information required by the updated disclosure requirements, we strongly advise companies to prepare for these changes in advance. Our professional team can assist companies in navigating the journey of climate-related disclosure by providing tailored services based on their disclosure readiness and experience, adopting a Phased Approach. Phase 1 aims to help companies develop a solid foundation for climate disclosure, while Phase 2 is dedicated to guiding companies in complying with the updated disclosure requirements. For details about the support we provided in Phase 1, please refer to the previous post https://greenco-esg.com/greenco-helps-navigate-climate-disclosure-journey-part-1/
In Phase 2, our objective is to assist companies in enhancing their compliance level by utilising scientific and systematic tools.
Phase 2:
Firstly, we can help companies define their organisational boundary by adopting an equity share approach, financial control approach or operational control approach. Next, we can assist companies in identifying their specific carbon footprints, including Scope 1 Direct Emissions, Scope 2 Energy Indirect Emissions and Scope 3 Other Indirect Emissions. It is worth noting that accounting for Scope 3 emissions is complex, as it involves both upstream and downstream emissions, encompassing 15 categories of Scope 3 activities. To address this complexity, we support companies in identifying their emissions along the value chain and developing the emissions inventory.
We assist companies in projecting the potential climate change impacts they may face by applying suitable climate scenarios and key assumptions based on their business nature, characteristics and locations. This enables companies to obtain scientifically-backed estimations of climate impacts and better prepare for the potential negative effects.
We help companies define meaningful short and long-term targets by establishing appropriate time horizons and baseline years, with reference to peer performance. Besides, we support companies in collecting meaningful data for performance monitoring and evaluation.
Building upon the initial Transition Plan and scenario analysis results, we assist companies in developing detailed transition plans with clear timetables and milestones. We also support companies in enhancing their risk management practices by integrating climate-related risks into their overall risk management approach. In this way, companies can transit towards sustainability and a low-carbon economy fairly and smoothly, while sustaining their competitiveness.
Drawing upon our extensive experience in preparing climate-related disclosures for our clients, we can guide you through the complexities of the disclosure journey, enhancing your climate disclosure performance and earning public recognition. We encourage companies to adopt both Phase 1 and Phase 2 to get ready earlier for the new mandatory climate-related disclosures.
